What The Heck Does IG Mean?

When you’re searching for commercial real estate and scouring through listings you’ll come across a ton of industry terms that are not very easy to understand. A popular commercial real estate lingo term that confuses a lot of tenants is, IG. You see this type of term a lot when looking for warehouse space or industrial space for rent.

What the Heck Does IG Stand for?

IG stands for, Industrial Gross rent. You will see the “IG” term next to the listed next to the rental rate or monthly rent amount of a commercial real estate listing you’re looking at. Unlike NNN Rent, the IG rent will cover some of the commercial property operating expenses you would normally have to pay on top of the Base Rent. Which means, the additional expenses you have to pay should be less than if you were renting a NNN rent property. Some of the expenses covered (included) in the Industrial Gross (IG) rent may include, but are not limited to, property taxes, exterior maintenance and insurance. In some markets, IG Rent is also referred to as Modified Gross (MG) rent.

For Example: Say the quoted IG Rent is $12.00 per square foot, per year and you’re leasing 5,000 square feet. Well, then you would be paying $60,000 in rent per year, or $5,000 per month.

Free Commercial Real Estate Listings | Digsy

What to Look Out for When Signing an IG Lease:

If you’re renting a property on an Industrial Gross (IG) or a Modified Gross (MG) basis, it’s always crucial to ask the landlord what the rent includes AND doesn’t include. This will help you determine what your total expenses of renting the space will be.

For example: Let’s say you the landlord tells you that the rent includes property taxes, exterior maintenance and building insurance. But it doesn’t include Utilities and Janitorial service. Well, then you will have to estimate and map out what these expenses will look like when you occupy the space so that you know your total cost of occupancy. Landlords will usually know what these numbers are. If not, ask them if they can refer you to one of the existing tenants who will share what they spend for these expenses in the property, so that you get a good idea of what they’ll be so you can calculate your occupancy costs.

Questions to Ask So You Don’t Get Hosed:

It’s a good idea to always ask the landlord if there are any additional costs you will incur that they are not telling you about. These expenses could be special taxes, special property expenses, etc. Be sure always to ask many questions and cover all your bases.

 

The last thing you want is to rent a property and pay much more than you anticipated because you didn’t ask enough questions.

 

Feel free to reach out to us for a complete list of commercial real estate terms or you can consult with one of our Digsy Experts on our website.

 

If you like this article, please click one of the buttons below to share it.

Please leave any questions on the comments section below.

 


Looking for Commercial Space to Lease?

Browse Free Property Listings below:

Los Angeles County 
Orange County
San Bernardino County 
Riverside County
San Diego County

Written by Andrew Bermudez

Andrew is the co-founder & CEO of Digsy, a free online platform that helps local business owners save time & money finding their dream office, retail & warehouse space. Before Digsy, Andrew was Senior Vice President & Principal of Lee & Associates Commercial Real Estate Services in Irvine, California. He's a 12 year commercial real estate brokerage veteran specializing in representing tenants, buyers and landlords.

Leave a Reply

Your email address will not be published.

*


This site uses Akismet to reduce spam. Learn how your comment data is processed.

3 Comments

  1. Check your lease for any eminent domain clause. Many of these give the owner all benefits if the property is taken by a condemning agency. Be sure to have the lessor provide you full disclosure in writing any proposed projects or takings, including, but not limited to, roads, utilities, redevelopment, etc. Since this is commercial property, it is typically buyer beware, rather than full disclosure as some states have for single family purchases. You don’t want an agency knocking on your door and telling you get out in 60 days, with no benefits, just after you’ve set up. It’s happened.

  2. Rather than ask the landlord what is to be added (or in addition to asking) critical to read and understand the lease you are thinking of signing.